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Understanding the 25-Contract Test in the Proposed PPLI Bill
Understanding the 25-Contract Test in the Proposed PPLI BillThe proposed PPLI Abuse Act introduces what is arguably its most significant structural requirement: the 25-contract test contained in proposed IRC §7702C(c).Rather than focusing solely on the policyholder or the investment strategy, the proposal fundamentally changes how a segregated asset account must be organised if the contracts it supports are to avoid classification as Applicable Private Placement Contracts (APPCs).If enacted, these rules would significantly reshape the design of private placement life insurance and private…
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